What changed in this filing

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Item 1A. Risk Factors

2026-02-26 compared with 2025-02-27 · 42 added, 39 removed, 354 unchanged (19% of the section changed)

6 unchanged sentences

Peoples’ success depends, in part, on local and national economic and political conditions, as well as governmental fiscal and monetary policies.

Conditions such as inflation, recession, unemployment, changes in interest rates, fiscal and monetary policy, an increasing federal government budget deficit, the failure of the federal government to raise the federal debt ceiling, slowing gross domestic product, tariffs, a U.S.

withdrawal from or significant renegotiation of trade agreements, trade wars, and other factors beyond Peoples’ control may adversely affect Peoples Bank’s deposit levels and composition, the quality of investment securities available for purchase, the demand for loans, the ability of Peoples Bank’s borrowers to repay their loans, and the value of the collateral securing the loans Peoples Bank makes.

Conditions such as inflation, recession, unemployment, supply chain issues or labor shortages, supply-demand imbalances affecting real estate prices, changes in interest rates, fiscal and monetary policy, an increasing federal government budget deficit, the failure of the federal government to raise the federal debt ceiling, slowing gross domestic product, tariffs, a U.S.

withdrawal from or significant renegotiation of trade agreements, trade wars, and other changes in trade regulations, and changes in the relationship of the U.S and U.S.

global trading partners, and other factors beyond Peoples’ control may adversely affect Peoples Bank’s deposit levels and composition, the quality of investment securities available for purchase, the demand for loans, the ability of Peoples Bank’s borrowers to repay their loans, and the value of the collateral securing the loans Peoples Bank makes.

Disruptions in U.S.

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or a combination of these or other factors.

The continued impact on economic conditions caused by rising inflation and changes in market interest rates could have an adverse effect on Peoples’ asset quality, deposit levels and loan demand, and, therefore, Peoples’ financial condition and results of operations.

The continued impact on economic conditions caused by inflation and changes in market interest rates could have an adverse effect on Peoples’ asset quality, deposit levels and loan demand, and, therefore, Peoples’ financial condition and results of operations.

Because a significant amount of Peoples Bank’s loans are secured by either commercial or residential real estate, decreases in real estate values could adversely affect the value of property used as collateral and Peoples Bank’s ability to sell the collateral upon foreclosure.

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Interest rates are highly sensitive to many factors that are beyond Peoples’ control, including general economic conditions and the policies of various governmental and regulatory agencies and, in particular, the Federal Reserve Board.

Interest rates are significantly impacted by governmental interest rate policies, including changes to such

policies that may result from potential changes in the composition of the Federal Reserve Board, changes in the interest rate environment due to the economic conditions and/or the fiscal and monetary policy measures undertaken by the U.S government and the Federal Reserve Board, including changes in the Federal Funds Target Rate, in response to such economic conditions.

Changes in monetary policy, including changes in interest rates, not only could influence the interest Peoples receives on loans and securities, and the amount of interest Peoples pays on deposits and borrowings, but such changes could also affect (1) Peoples’ ability to originate loans and obtain deposits, (2) the fair value of Peoples’ financial assets and liabilities, and (3) the average duration of Peoples’ mortgage-backed securities portfolio.

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Higher revenue volatility from changes in interest rates and spreads to benchmark indices could cause a loss of future net interest income and a decrease in the fair market values of Peoples’ assets.

Fluctuations in interest rates will impact both the level of income and expense recorded on most of Peoples’ assets and liabilities

and the market value of all interest-earning assets and interest-bearing liabilities, which in turn could have a material adverse effect on Peoples’ net income, results of operations and financial condition.

Fluctuations in interest rates will impact both the level of income and expense recorded on most of Peoples’ assets and liabilities and the market value of all interest-earning assets and interest-bearing liabilities, which in turn could have a material adverse effect on Peoples’ net income, results of operations and financial condition.

Peoples cannot predict the nature or timing of future changes in monetary policies or the precise effects that they may have on Peoples’ activities and financial results.

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These interest rate swaps are designated as cash flow hedges and involve the receipt of variable rate amounts from a counterparty in exchange for fixed payments from Peoples.

At December 31, 2024, Peoples had eight effective interest rate swaps, with an aggregate notional value of $75.0 million, which were designated as cash flow hedges of brokered deposits, and which are expected to be extended every 90 days through the maturity dates of the swaps.

At December 31, 2025, Peoples had five effective interest rate swaps, with an aggregate notional value of $45.0 million, which were designated as cash flow hedges of brokered deposits, and which are expected to be extended every 90 days through the maturity dates of the swaps.

Although Peoples expects that the hedging relationships described above will be highly effective, such relationships could prove ineffective.

At December 31, 2025, the termination value of derivative financial instruments in a net liability position was $9.3 million, which included accrued interest but excluded any adjustment for nonperformance risk.

At December 31, 2024, Peoples had no collateral posted with its derivative counterparties and the derivative financial counterparties had $12.3 million of cash pledged and $1.9 million of investment securities pledge.

At December 31, 2025, Peoples had $4.2 million of cash pledged with its derivative counterparties, while the counterparties had $2.1 million of cash collateral pledged.

Peoples and its derivative counterparties did not have investment securities pledged at December 31, 2025.

If Peoples had breached any of the provisions of the derivative financial instruments at December 31, 2025, Peoples could have been required to settle its obligations under the derivative financial agreements at the termination value.

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In addition, the October 7, 2023 attack by Hamas in Israel has resulted in prolonged conflict and disruption in the Middle East.

Although the length, impact and outcome of the ongoing war in Ukraine and the conflict in the Middle East are highly unpredictable, these conflicts have resulted, and could continue to result, in significant market and other disruptions, including significant volatility in commodity prices and supply of energy resources, instability in financial markets, supply chain interruptions, political and social instability, changes in consumer or purchaser preferences, as well as increases in cyberattacks and espionage.

Further, there has been growing tension with Venezuela in recent months as well as increased trade competition with China.

Although the length, impact and outcome of the global conflicts are highly unpredictable, these conflicts have resulted, and could continue to result, in significant market and other disruptions, including

significant volatility in commodity prices and supply of energy resources, instability in financial markets, supply chain interruptions, political and social instability, changes in consumer or purchaser preferences, as well as increases in cyberattacks and espionage.

The extent and duration of the military action, sanctions and resulting market disruptions could be significant and could potentially have substantial impact on the global economy and Peoples’ business for an unknown period of time.

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Peoples collects, processes and stores sensitive consumer data by utilizing computer systems and telecommunications networks operated by both Peoples and third-party service providers.

Peoples’ dependence upon automated systems to record and process Peoples’ transactions poses the risk that technical system flaws, employee errors, tampering or manipulation of those systems, or attacks by third parties will result in losses and may be difficult to detect.

Peoples’ dependence upon automated systems to record and process Peoples’ transactions poses the risk that technical system flaws, employee errors, tampering or manipulation of those

systems, or attacks by third parties will result in losses and may be difficult to detect.

Peoples has security and backup and recovery systems in place, as well as a business continuity plan, designed to ensure the computer systems will not become inoperable, to the extent possible.

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Information security breaches can also disrupt the operation of information systems on which Peoples and its customers depend, adversely affecting business operations.

Such events can result in costly remediation measures and litigation or governmental investigation and responding to security breaches can place unanticipated demands on the time and

attention of management.

Such events can result in costly remediation measures and litigation or governmental investigation and responding to security breaches can place unanticipated demands on the time and attention of management.

Peoples relies on security systems to provide the protection and authentication necessary to secure transmission of data against damage by theft, fire, power loss, telecommunications failure or similar catastrophic event, as well as from security breaches, ransomware, denial of service attacks, viruses, worms, and other disruptive problems caused by hackers.

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The Financial Crimes Enforcement Network (also known as FinCEN), a unit of the U.S.

Department of the Treasury that administers the BSA, is authorized to impose significant civil money penalties for

violations of those requirements and has recently engaged in coordinated enforcement efforts with the federal bank regulatory agencies, as well as the U.S.

Department of Justice, the U.S.

Drug Enforcement Administration, and the U.S.

Internal Revenue Service.

Department of the Treasury that administers the BSA, is authorized to impose significant civil money penalties for violations of those requirements.

The AMLA is intended to be a comprehensive reform and modernization to U.S.

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• Peoples’ failure to be in compliance with any material provision or covenant of its debt instruments could have a material adverse effect on Peoples’ liquidity and operations.

Peoples has a Loan Agreement (the “U.S.

Bank Loan Agreement”) with U.S.

Bank National Association that provides Peoples with a revolving line of credit.

A Sixth Amendment to the U.S.

Bank Loan Agreement, entered into on March 31, 2024, extended the maturity from April 1, 2024 to March 31, 2025.

Peoples has a Loan Agreement with U.S.

Bank National Association (the “U.S.

Bank Loan Agreement”) that provides Peoples with a revolving line of credit.

A Seventh Amendment to the U.S.

Bank Loan Agreement, entered into on March 28, 2025, extended the maturity from March 31, 2025 to March 30, 2026.

Bank Loan Agreement imposes operating and financial covenants on Peoples.

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These models reflect assumptions that may not be accurate, particularly in times of market stress or other unforeseen circumstances.

Even if these assumptions are accurate, the model may prove to be inadequate or inaccurate because of other flaws in their design or their

implementation.

Even if these assumptions are accurate, the model may prove to be inadequate or inaccurate because of other flaws in their design or their implementation.

If the model Peoples uses for interest rate risk and asset-liability management is inadequate, Peoples may incur increased or unexpected losses upon changes in market interest rates or other market measures.

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• Peoples may not be able to adapt to technological change.

The financial services industry is continually undergoing rapid technological change with frequent introductions of new technology-driven products and services.

The financial services industry is continually undergoing rapid technological change with frequent introductions of new technology-driven products and services, including artificial intelligence.

The effective use of technology increases efficiency and enables financial institutions to better serve customers while reducing costs.

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The ability of a financial institution to meet its current financial obligations is a function of its balance sheet structure, its ability to liquidate assets, and its access to alternative sources of funds.

The bank failures in 2023 exemplify the potential serious results of the unexpected inability of insured depository institutions to obtain needed liquidity to satisfy deposit withdrawal requests, including how quickly such requests can accelerate once uninsured depositors lose confidence in an institution’s ability to satisfy its obligations to depositors.

The bank failures in recent years exemplify the potential serious results of the unexpected inability of insured depository institutions to obtain needed liquidity to satisfy deposit withdrawal requests, including how quickly such requests can accelerate once uninsured depositors lose confidence in an institution’s ability to satisfy its obligations to depositors.

Peoples seeks to ensure its funding needs are met by maintaining a level of liquidity through asset and liability management.

17 unchanged sentences

The preparation of consolidated financial statements in conformity with US GAAP requires management to make significant estimates that affect the financial statements.

Due to the inherent nature of these estimates, actual results may vary materially from management’s estimates.

Due to the inherent nature of these estimates, actual results may vary materially from

management’s estimates.

Additional information regarding Peoples’ critical accounting policies and the sensitivity of estimates can be found in the section captioned “Critical Accounting Policies” in “ITEM 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS” and “Note 1 Summary of Significant Accounting Policies” of this Form 10-K.

10 unchanged sentences

Increases in FDIC insurance premiums may have a material adverse effect on Peoples’ results of operations and ability to continue to pay dividends on its common shares at the current rate or at all.

On November 16, 2023, the FDIC Board adopted a final rule implementing a special assessment to recover the loss to the DIF arising from the protection of uninsured depositors following the failures of Silicon Valley Bank and Signature Bank.

The assessment base for the special assessment is equal to an insured depository institution’s estimated uninsured deposits reported for the quarter ended December 31, 2022, adjusted to exclude the first $5 billion in estimated uninsured deposits.

The FDIC will

collect the special assessment at an annual rate of approximately 13.4 basis points, over eight quarterly assessment periods, beginning with the first quarter of 2024.

Because Peoples Bank’s uninsured deposits were less than $5 billion for the quarter ended December 31, 2022, Peoples Bank was not subject to this special assessment.

The FDIC Board adopted a final rule which implemented a special assessment to recover the losses to the DIF arising from the failures of Silicon Valley Bank and Signature Bank.

This special assessment was based on total uninsured deposits, which the value of such deposits held by Peoples was below the threshold set by the assessment, and thus Peoples was not subject to the assessment.

However, there can be no assurance that assessments may not be changed in the future and/or that additional special assessments may not be imposed in the future by the FDIC, either in response to additional bank failures or otherwise, that could increase the amount of premiums required to be paid to the FDIC by Peoples Bank.

17 unchanged sentences

Advances in technology such as e-commerce, telephone, internet and mobile banking, and in-branch self-service technologies including ATMs, ITMs, and other equipment, as well as changing customer preferences for these other methods of accessing Peoples’ products and services, could affect the value of Peoples’ financial service office network or other retail distribution assets and may cause Peoples to change its retail distribution strategy, close and/or sell certain financial service offices and restructure or reduce its remaining financial service offices and work force.

Further advances in technology and/or changes in customer preferences including those related to social media, digital or cryptocurrency, blockchain and other “fintech” technologies could result in additional changes in Peoples’ retail distribution strategy and/or financial service office network.

Further advances in

technology and/or changes in customer preferences including those related to social media, digital or cryptocurrency, blockchain and other “fintech” technologies could result in additional changes in Peoples’ retail distribution strategy and/or financial service office network.

These actions could lead to losses on these assets or could adversely impact the carrying value of other long-lived assets and may lead to increased expenditures to renovate and reconfigure remaining financial service offices or to otherwise reform Peoples’ retail distribution channel.

5 unchanged sentences

While Peoples generally invests in securities issued by U.S.

government agencies and sponsored entities and domestic state and local governments with limited credit risk, certain investment securities held by Peoples possess higher credit risk since they represent beneficial interests in structured investments collateralized by residential mortgages, debt obligations and other similar

asset-backed assets.

Even securities issued by governmental agencies and sponsored entities may entail risk depending on political and economic changes.

24 unchanged sentences

Several of Peoples’ competitors have greater resources, larger branch systems and wider arrays of banking and non-banking services.

This competition could reduce Peoples’ net income by decreasing the number and size of loans that Peoples originates and the interest rates it can charge on these loans.

This competition could reduce Peoples’ net income by decreasing

the number and size of loans that Peoples originates and the interest rates it can charge on these loans.

Moreover, technology and other changes are allowing businesses and individuals to utilize alternative methods to complete financial transactions that historically have involved banks.

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If Peoples is unable to compete effectively, Peoples will lose market share, which could reduce income generated from deposits, loans and other products.

In July 2025, President Trump signed into law the GENIUS Act, which establishes a regulatory framework for “payment stablecoins” and their issuers.

Consumers and businesses may view payment stablecoins as a substitute for traditional bank deposits, resulting in deposit withdrawals.

Depending on consumer and business interest in payment stablecoins, and the characteristics and utility of payment stablecoins, the passage of the GENIUS Act could result in increased competition with respect to Peoples’ deposit products.

However, the GENIUS Act requires the U.S.

Treasury Department and federal and state regulators to issue regulations on numerous topics to interpret and implement the statute, so the effect of the GENIUS Act will depend on what those regulations provide.

For a more complete discussion of Peoples’ competitive environment, see the section captioned “Competition” in “ITEM 1 BUSINESS” of this Form 10-K.

1 unchanged sentence

Financial institutions are facing increasing scrutiny from customers, regulators, investors, and other stakeholders related to their environmental, social, and governance (“ESG”) practices and disclosure.

Investor advocacy groups, investment funds, and

influential investors are also increasingly focused on these practices, especially as they relate to the environment, health and safety, diversity, labor conditions, and human rights.

Investor advocacy groups, investment funds, and influential investors are also increasingly focused on these practices, especially as they relate to the environment, health and safety, diversity, labor conditions, and human rights.

Increased ESG-related compliance costs for Peoples as well as among its suppliers, vendors and various other parties within its supply chain could result in increases to its overall operational costs.

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Peoples is exposed to the risk that when a peer financial institution experiences financial difficulties, there could be an adverse impact on the regional banking industry and the business environment in which Peoples operates.

For example, the bank failures of Silicon Valley Bank in California, Signature Bank in New York, First Republic Bank in California, and Heartland Tri-State Bank in Kansas during 2023 caused a degree of panic and uncertainty in the investor community and among bank customers generally.

For example, the bank failure of Republic First Bank during 2024, and the closures of Silicon Valley Bank in California, Signature Bank in New York, First Republic Bank in California, and Heartland Tri-State Bank in Kansas during 2023 caused a degree of panic and uncertainty in the investor community and among bank customers generally.

Peoples will continue to monitor potential bank failures and volatility within the banking industry generally, together with any responsive measures taken by the banking regulators to mitigate or manage potential turmoil in the banking industry.

12 unchanged sentences

Peoples is subject to extensive federal, state and local taxes, including income, excise, sales/use, payroll, franchise, withholding and ad valorem taxes.

Changes to tax laws could have a material adverse effect on Peoples’ results of operations, fair values of net deferred tax assets and obligations of states and political subdivisions held in Peoples’ investment securities portfolio.

Changes to tax laws could have a material adverse effect on Peoples’ results of operations and the realization of net deferred tax assets.

In addition, Peoples’ customers are subject to a wide variety of federal, state and local taxes.

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors